One of the key elements in any commercial insurance policy is the rebuild costs. Here Maunder Taylor, who provide business insurance services in Whetstone, Totteridge and the surrounding area, explain why.
What Are Rebuild Costs?
Rebuild costs are defined as ‘the amount it would cost to rebuild if it were destroyed’, such as by fire or flooding. As well as the direct costs of material and labour, the figure also needs to take account of professional fees, such as those charged by architects or surveyors, as well as the cost of any planning applications you have to make. Clearing the site and removing any debris will also be covered by the rebuild costs figure.
What it does not cover is the value of the land the property stands on; even if the premises are destroyed, the land itself is usually unaffected. It’s also worth noting that rebuild costs are not the same thing as the property’s market value (which also includes the land value) and any business rates.
It’s Not a Static Figure
Rebuild costs vary over time and not just because of the fluctuating costs of building materials and other factors which are subject to the usual inflationary pressures. Some insurers index-link their policies, which takes account of typical price rises over the course of a year.
However, if you extend the premises or make other improvements then this should be reflected in a higher figure – and, in turn, by a higher insurance premium. So it’s crucial that the initial sum you are insured for is accurate and that you tell your insurer of any subsequent changes to the property; otherwise you could be insured for too much or too little.
‘The Condition of Average’
Some insurers use what is known as ‘the condition of average’ when it comes to paying out on rebuild costs. For example, if your property is insured for £100,000 when it should be £200,000, you could be facing a financial shortfall if you ever need to make a claim. If the property is damaged by a fire and you make a claim for £50,000, the insurer will only pay out £25,000 if there is a condition of average clause in place; – 50% of the difference. This again emphasises the importance of having your premises insured for the correct amount.
Business Insurance Services in Whetstone from Maunder Taylor
Whatever type of commercial premises you would like to insure, Maunder Taylor will be able to help. We first set up our insurance department 30 years ago and have since been registered with the Financial Conduct Authority.
We can carry out business insurance valuations for premises in London or Hertfordshire to help determine your appropriate level of cover. We can then act as a broker to obtain a series of competitive quotes from insurance companies.
Maunder Taylor can also offer a range of specialist insurance covers including Employers’ Liability, Directors’ and Officers’ Liability, and Common Parts Contents. Many of these are essential for managed buildings.
Whatever type of policy you need, we will make sure it’s written in plain English so you can easily understand it. In the event of any claims, our in-house team will be on hand to guide you through the process.
If you would like to know more about our business insurance services, follow this link or contact our Whetstone office on 020 8446 0011. If you have any residential block management queries, call our Potters Bar office on 01707 665 666.